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Pradip Churiwal, Managing Director and Chief Executive Officer of Macneill Engineering Ltd. (MEL), the Rs. 65 crore Kolkata-based company in manufacturing and rendering services in the materials handling equipment sector, outlined his company’s future in a detailed interview with BE’s Kingshuk Banerjee.

Q. How did Macneill Engineering Ltd. (MEL) ensure its turnaround?

A. Macneill Engineering Ltd. is a forklift and material handling company. It was originally part of Macneill Magor Ltd. and in 1988 it was separated and converted into a public limited company, belonging to the Willamson Magor Group. In 2003, the Star Track Group took over MEL. Star Track is primarily in steel and warehousing business.

MEL got an opportunity to develop flame proof forklift for IOCL Panipat through their EPC contractor Larsen and Toubro (L & T). At that time, this kind of forklift was not manufactured in India. MEL developed flame proof forklifts and supplied it. That was the turning point for our company. Subsequently, MEL bagged the order of supplying 54 forklifts worth Rs. 12 crore.

From 2004 to 05 fiscal to the 2008 to 09 fiscal, the rate of growth of production was 80% to 100% per annum and in 2009 MEL cleared its Rs. 12 crore bank loan.

Q.  How did the company get into the service sector?

A. In 2010, apart from manufacturing, MEL ventured into the service sector. MEL started proving forklift with manpower to IOCL, Panipat, BHEL, Bhopal and ITC Guntur. In 2010, Rs. 20 crore worth of forklift were sold and Rs. 5 crore worth of machines were put into service.  The situation was such that half of the production was consumed by MEL itself by inducting them into the service sector. In the 2017-18 fiscal, the service wing earned Rs. 33 crore while sales lagged behind with Rs. 17 crore.

The sales have started picking up post-GST and it could touch Rs. 25 crore and service could go up to Rs. 45 crore in 2018-19. There would be a growth of 40% this year compared to last year. The boost in sales could be mainly coming from forklift and e-rickshaw. Though MEL is West Bengal based company, it renders service across India, with 90% revenue coming from outside the state.

Q. Would MEL stick to its core business or are there plans for diversification?

A. MEL is diversifying into polypropylene bags, making these through a subsidiary. On September 19, 2018, MEL has decided to set up a polypropylene bag making plant at an investment of eight crore in Paradip through its subsidiary. 40% financing would be internal and rest 60% would from bank loans.

Q. MEL is already into the warehousing business. Would it plan to enter the logistic sector in a big way?

A. MEL is giving this serious thought. There is a prospect of entering the water logistics sector as well. MEL is also exploring the possibility of getting a smaller cargo ship to transport polymer from Paradip.

Q. What are your future plans in your core sector?

A. MEL has decided to set up one unit for production of platform truck and e-rickshaw at a 1.5 acre land in the industrial growth centre of Matia in Goalpara district, Assam with investment to the tune of  rupees six crore. This plant would be commissioned before March 2019. The platform truck is mainly used in the railways, defence and power sector. Matia plant could be producing around 720 e-rickshaws and 300 platform trucks.

Though the production capacity of e-rickshaw and forklift trucks is 1200 and 900 respectively in Joka, we are utilising 33% of our production capacity.

MEL is also producing about 900 hydraulic hand pallets and 18 to 24 reach trucks under the brand name of Macneill. The other manufacturing plant is in Dhulagrah, where out of capacity of 30, 18 to 20 platform trucks are being made.

Q. What are your plans of finance generation?

A. In order to finance the Assam project, modernising the existing Joka plant and to infuse working capital, the company would be coming out with its maiden Rs. 30-32 crore Initial Public Offering (IPO) in February 2019. This is expected to generate rupees six crore for the project in Assam, rupees five crore for e-rickshaw plant in Howrah and rupees five crore for the new Paradip project.

Q. What’s the current financial situation?

A. MEL could be doing Rs. 100 crore business in the 2019-20 fiscal, a marked increase from Rs. 70 crore turnover in 2018-19. Both sales and services would be Rs. 50 crore apiece in 2019-20.

Q. How do you view your company in 2030?

A. MEL would aim to be a Rs. 550 crore company by 2030, in which Rs. 300 crore could come from service and Rs. 250 crore could come from sales. The equipment handing sector is 10,000 units annually and is growing at 10% to 15% per annum. MEL is looking for automation options for its Joka factory and that could cost around three crore.

Q. How is your steel consumption?

A. Presently, for body making of the forklift trucks, reach truck and other products, roughly 150 tonnes of steel are required per month. By 2030, the steel consumption could reach 1000 to 1100 tonnes per month and MEL could directly procure it from plants.